Author: Bob Ai

Thai lender KASIKORNBANK (KBank) has entered a strategic collaboration with Ant International to develop blockchain-based infrastructure for real-time, 24/7 cross-border USD transactions, combining KBank’s regulated banking capabilities with AI tools from Ant Group’s cross-border payments arm.

The partnership will leverage Kinexys’ Blockchain Deposit Accounts, a distributed ledger platform by J.P. Morgan, to enable real-time USD liquidity movement. This is expected to improve transaction speeds and address liquidity bottlenecks in the regional cross-border payments market that currently forces SMEs to navigate fragmented clearing and settlement systems.

Under the agreement, the two parties plan to develop end-to-end solutions covering payment acceptance, clearing, and settlement across Southeast Asia, subject to regulatory approvals. The move builds on an existing relationship: KBank’s KPLUS mobile app is already integrated with Alipay+, Ant’s digital wallet gateway, linking to over 1.8 billion consumer accounts globally. KPLUS also serves as a payment option on Google Pay for Thai merchants via Antom.

Dr. Karin Boonlertvanich, Executive Vice President at KBank, said: “This collaboration addresses a fundamental limitation in today’s cross-border financial systems, where liquidity movement remains constrained by fragmented infrastructure.”

Ant International’s Kelvin Li added: “Across emerging markets, industry leaders like KBank are preparing communities for a more interconnected global economy with broader and more secure application of AI and blockchain technology.”

The deal occurs against a backdrop of expanding ASEAN cross-border payment initiatives, including the ASEAN Cross-Border Payment Linkage initiative and individual national CBDC pilots. Thailand’s Bank of Thailand has been exploring digital baht infrastructure since 2022, while Singapore’s Monetary Authority has advanced Project Orchid with the Bank of Japan for cross-border digital currency settlements.

For Asian legal readers, the KBank-Ant arrangement raises questions about regulatory oversight of blockchain-based banking services across borders, particularly as banks increasingly partner with offshore tech platforms to bypass legacy correspondent banking constraints.

Source: FinTech Singapore — Original article

The United States, United Kingdom, and Australia have announced a new underwater drone technology development project under their military AUKUS alliance, marking the first major signature project under the pact’s Pillar Two of advanced capabilities.

Speaking at the Shangri-La Dialogue security summit in Singapore on May 30, 2026, the defence ministers of all three nations confirmed uncrewed undersea vehicle (UUV) technology expected to be operational by next year. UK Defence Secretary John Healey said Britain would contribute £150 million to the programme.

The announcement was a direct response to mounting criticism that AUKUS—the trilateral defence pact launched in 2021—had been too slow to deliver. “For too long in AUKUS, we talked too much and delivered too little,” Healey said. “That has now changed.”

The UUVs would carry cutting-edge payloads and enabling systems capable of protecting seabed infrastructure such as undersea communication cables and energy pipelines, conducting strikes, and carrying out surveillance and reconnaissance operations across the Indo-Pacific region.

Healey also confirmed that sensors and weapons systems would be developed for the drones, which he said would ‘rapidly give our forces advanced battle technologies,’ including capability to counter threats to underwater cables and pipelines. He noted the programme would strengthen deterrence in the Pacific, Atlantic, and Arctic waters.

The project comes against a backdrop of increasing concern over undersea infrastructure vulnerabilities. British officials report a 30% rise in Russian vessels spotted in UK waters over the past years, and there have been multiple reports of undersea cables damaged in the Baltic Sea and in waters surrounding Taiwan.

Alongside the drone announcement, US Defence Secretary Pete Hegseth reaffirmed the United States’ commitment to its Asia-Pacific allies while pushing them to increase defence spending. He set a target of 3.5% of GDP for allied military budgets, praising South Korea, Japan, Australia, and the Philippines for recent defence cooperation with Washington, while calling New Zealand a ‘freeloader.’

The AUKUS partnership remains widely viewed as a strategy to counter China’s growing maritime presence in the Indo-Pacific. China has declined to send its defence minister to the Shangri-La Dialogue for the second consecutive year, while Japan’s Defence Minister Shinjiro Koizumi strongly rebuffed Beijing’s repeated accusations of ‘new militarism’ during his speech at the summit earlier the same day.

In what represents a significant shift in U.S. corporate tax policy, the Trump administration has cleared the way for American companies to avoid paying taxes in U.S. tax havens while instead routing profits through offshore jurisdictions including Malta and Cyprus.

According to a report by the New York Times published on May 29, 2026, the policy change effectively allows U.S. corporations to structure their operations so that taxable income is redirected away from the United States and toward countries that serve as traditional tax havens. This marks a notable reversal in intent regarding offshore tax avoidance, which has been a campaign issue in recent years.

The decision carries particular significance for Southeast Asia, where several jurisdictions serve as important offshore financial centers. Malaysia, in particular, has positioned itself as a leading financial hub in the ASEAN region, with well-developed Islamic finance, wealth management, and fund administration capabilities. The country has actively courted international financial institutions and family offices in recent years as part of its broader economic strategy.

While Malta and Cyprus are explicitly named in the NYT report, the broader implications extend across multiple Southeast Asian financial centers. The region has seen growing demand for private banking and fund administration services, with firms in Singapore, Malaysia, and the Philippines expanding operations to capture cross-border wealth management flows. Any policy shift that encourages corporate tax avoidance through offshore structures could amplify these trends.

The move is expected to face scrutiny from international tax bodies and may draw further regulatory responses from other governments. The OECD’s global minimum tax framework, which aims to prevent a “race to the bottom” in corporate taxation, could face additional pressure as more U.S. companies exploit these new pathways.

For ASEAN regulators and financial compliance officers, the development signals a more permissive U.S. stance on offshore tax structures — a policy environment that could influence how regional financial centers position themselves in the global tax architecture. The timing is critical: with crypto regulation, cross-border payment frameworks, and anti-money laundering standards evolving rapidly across Southeast Asia, the region’s financial hubs will need to navigate a complex and shifting international compliance landscape.

The story underscores how U.S. tax policy decisions continue to reverberate through Southeast Asian financial markets and regulatory frameworks — even when the immediate geographic focus is on European tax havens.

Read the full story: “Trump Clears Way for Companies to Avoid Taxes in Havens Including Malta and Cyprus” — The New York Times

Thailand’s PromptPay digital payment system — one of Southeast Asia’s most successful financial infrastructure projects — could serve as a blueprint for modernising the global trade finance sector, according to Rahul Bhargava, a senior financial sector advisor at the World Bank and interim chief operating officer of Contour Network.

Bhargava made the case at Money20/20 Asia 2026 in Bangkok, arguing that while consumer payments in Southeast Asia have advanced rapidly, the trade finance industry remains mired in inefficiency. The sector continues to rely heavily on paper-based letters of credit, manual bank confirmations via phone and email, and disconnected systems that force banks, buyers, sellers, and logistics firms to coordinate across siloes.

Trade Finance’s Chronic Bottlenecks

A critical problem, Bhargava explained, is the lack of true data integration. When payment terms are altered through informal channels such as email or WhatsApp but primary documents are not updated, disputes and operational errors follow. Trade documents frequently sit in separate systems with no automatic reconciliation, leading to delays that cost businesses time and money.

In contrast, modern payment platforms like PromptPay can send settlement confirmations almost instantly, notifying recipients within seconds that funds have arrived. Yet in trade finance, organisations still depend on manual confirmations from banks — a stark contrast in speed and reliability.

PromptPay: A Dual Approach That Works

PromptPay’s success, launched in 2016, stems from what Bhargava called a powerful synergy of top-down and bottom-up forces. The Bank of Thailand set clear roadmaps, established common standards for digital payments, and created regulatory sandboxes for innovation trials. Meanwhile, banks, payment providers, and citizens embraced the technology, transforming daily transaction volumes from hundreds of thousands at launch to over 81 million today.

The system allows users to transfer money using citizen IDs, mobile phone numbers, or bank account numbers with minimal fees. Transfers are free under THB 5,000 (US$153), with larger transactions charged nominal fees of THB 2 to THB 10. PromptPay is also used for government social welfare disbursements, tax reimbursements, B2B payments, and electronic donations.

Cross-Border Expansion Underway

The Bank of Thailand is actively connecting PromptPay with similar systems across the region, including Malaysia’s DuitNow and Singapore’s PayNow, enabling seamless cross-border transactions. QR code payment connectivity has also been extended to Hong Kong and Laos.

Data compiled by the Emerging Payments Association Asia shows dramatic shifts in Thailand: account-to-account transactions accounted for 41% of all point-of-sale payment value in 2024, surpassing cash at 31%, giving cashless payments a total 66% share. Digital banking accounts reached 181.8 million in January 2026, with transaction volumes up 10.6% year-on-year.

Implications for Global Trade

Bhargava’s proposal is that the global trade sector could replicate PromptPay’s regulatory-technology partnership model. The Contour Network, which operates a blockchain-enabled platform for digitising letters of credit since 2017, has been exploring how to integrate trade digitalisation with payments and settlement within a unified ecosystem. If successful, the model could dramatically reduce trade processing times and costs across Southeast Asia and beyond.

For ASEAN regulators and financial institutions, the story offers a compelling case study: state-backed standard-setting, combined with private-sector adoption and a permissive regulatory environment, can produce payment infrastructure that scales to hundreds of millions in daily transactions — and the next frontier may be transforming the multi-trillion-dollar trade finance industry.

Read the full story: https://fintechnews.sg/131823/thailand/promptpay-as-a-blueprint-to-modernize-trade-finance-and-infrastructure/

The Indonesian government announced Thursday that the upstream oil and gas sector will be exempted from the controversial single-gate export centralization policy, a significant reversal that underscores the political economy’s sensitivity in a capital-intensive industry reliant on foreign investment.

Energy and Mineral Resources Minister Bahlil Lahadalia told delegates at the 2026 Indonesian Petroleum Association Convention and Exhibition in BSD City that the regulation under PP No. 21/2026 will not apply to upstream oil and gas operations. “I bring a special message from the President: the regulation does not apply to the upstream oil and gas sector. So, there is no need to worry, it’s business as usual,” he said.

Under a separate concession, Bahlil also confirmed that oil and gas exporters face different deposit rules than other exporters. Forex retention in the sector will be capped at 10 to 30 percent, reflecting heavy reliance on foreign financing.

The exemptions come days after President Prabowo announced on May 20 that key commodity exports — crude palm oil, coal, and ferroalloys — would be channeled through a single state-owned enterprise, PT Danantara Sumberdaya Indonesia (DSI). The government aims to prevent under-invoicing and transfer pricing fraud, which officials said could be costing the state up to US$150 billion annually.

During a June-to-September trial phase, exporting firms will still conduct direct transactions with buyers, but DSI handles export filing. From January 2027, DSI takes full control of export contracts, shipments, and payments. A later phase will expand the list to all strategic natural resource commodities.

The policy has drawn business pushback. The Indonesian Coal Mining Association warned that existing contracts, permits, and shipping schedules complicate any abrupt shift, while industry groups fear a de facto monopoly that could undermine buyer confidence across ASEAN markets.

Coordinating Economy Minister Airlangga Hartarto confirmed the revised regulation allows exporters to place part of their proceeds outside the Himbara banking consortium. The government also halved the currency conversion limit for FTA trading partners from 100 percent to 50 percent.

For ASEAN, Indonesia’s unilateral trade policy marks a significant shift in how Southeast Asia’s largest economy manages commodity export flows. Analysts warn it could trigger regional pushback and complicate Jakarta’s standing in ASEAN economic cooperation frameworks.

Polymarket, the world’s largest decentralized prediction market platform, is exploring entry into Japan, marking a potentially significant development for the cross-border fintech industry in East Asia. The move comes even as the platform faces intensifying regulatory headwinds across multiple jurisdictions.

According to reports, the FTX-backed company is actively pursuing Japan as its next major market expansion following its success in European and Latin American jurisdictions. Japan represents one of the largest and most mature markets for prediction markets globally, with a substantial domestic culture of speculative and forecast-based financial products.

The timing is particularly notable given the heightened regulatory scrutiny Polymarket and similar platforms face worldwide. In India, for instance, Polymarket was recently blocked by government directive, with India’s Ministry of Electronics and Information Technology ordering service providers to terminate access to the platform in what was described as part of a broader crackdown on cross-border online prediction and betting platforms.

In the United States, Polymarket has also come under congressional scrutiny, with a US House inquiry launched into potential insider trading related to the platform’s markets on geopolitical events. The probe, led by the House Oversight Committee, has called for detailed disclosures from Polymarket’s leadership regarding how the platform manages and prevents insider information from influencing market outcomes.

Japan’s approach to prediction markets would represent a test case for the country’s broader regulatory posture toward novel financial technologies. The Financial Services Agency (FSA) has historically taken a cautious but evolving stance on crypto-adjacent financial products, having recognized cryptocurrencies as legal property in 2017 and subsequently establishing a licensing framework for virtual asset service providers. The introduction of a new regulatory category for prediction markets would require either new legislation or an interpretive expansion of existing financial instruments regulation.

For ASEAN regulators watching closely, Japan’s treatment of platforms like Polymarket could set precedent that reverberates across Southeast Asia, where regulators are still grappling with the classification and oversight of prediction market infrastructure and its implications for consumer protection, market integrity, and capital controls.

The story highlights the broader tension in Asian financial regulation between fostering innovation-friendly environments and managing the risks associated with novel financial instruments that operate across borders and traditional regulatory boundaries.

India has moved to shut down global prediction market platforms from within its borders, with Polymarket — the world’s largest decentralized prediction market — becoming inaccessible for Indian users this week. The enforcement marks a significant escalation in India’s approach to regulating cross-border online prediction and betting platforms, and sends ripple signals across the Asian fintech and crypto landscape.

The outage follows a directive issued on April 25 by India’s Ministry of Electronics and Information Technology (MeitY) to local VPN service providers. The ministry warned that Indian users were continuing to access “illegal and blocked prediction market and online betting platforms” despite existing domestic prohibitions, and directed internet service providers to terminate access to these platforms. Polymarket was among the primary targets.

CoinDesk first reported that Polymarket’s website now returns a “This site can’t be reached” error for users attempting to access it from India. Refreshing the page does not resolve the connection issue, confirming that the blocking is actively enforced at the network level rather than an isolated service disruption.

While Polymarket — a platform built on US-based blockchain infrastructure that allows users to bet on real-world outcomes from elections and geopolitics to sports and economics — is now blocked, another major player, Kalshi, remains accessible in India for now. However, reports from local media citing anonymous MeitY sources claim the ministry has “already issued a blocking order to Polymarket and are in the process of issuing an order to Kalshi as soon as Friday.”

Kalshi holds a notable distinction: unlike Polymarket, it is regulated by the U.S. Commodity Futures Trading Commission (CFTC) and operates with compliance frameworks that would typically make it a model for regulatory engagement. The prospect of Kalshi also being blocked — even with its regulatory credentials intact — suggests India’s approach extends beyond unregistered platforms to all prediction market operators, regardless of where they hold licenses.

The timing is significant for Asian regulatory dynamics. India’s massive digital economy — with hundreds of millions of smartphone users engaged in both traditional online betting and emerging crypto-adjacent activities — makes it a critical battleground for platform operations. Several other ASEAN nations, including Singapore and Malaysia, have been actively debating how to regulate prediction markets and binary outcome trading, and India’s hard-line approach will likely factor into those deliberations.

Singapore’s Monetary Authority (MAS) has taken a principles-based regulatory stance on AI applications in financial services, which extends to novel trading instruments. Malaysia’s Securities Commission has explored regulating “betting exchanges” under securities law. Thailand has been developing frameworks for digital asset service providers. India’s blocking of Polymarket signals that at least one major South and Southeast Asian jurisdiction is willing to deploy coercive technical measures rather than engage in negotiated regulatory frameworks.

The broader implications are far-reaching for cross-border fintech regulation in the region. If Kalshi is also blocked, it would demonstrate that India’s prohibition applies broadly to prediction markets regardless of jurisdiction, regulatory status, or compliance posture. For the platforms involved, this creates an uncertain operating environment across the region, where one nation’s enforcement action can signal to others to follow suit.

CoinDesk reached out to both Polymarket and Kalshi for comment at the time of reporting. As of this writing, neither platform has issued a public statement regarding the Indian blocking. The situation is developing rapidly, and the Kalshi blocking order — reportedly imminent as of the original report — could further reshape the regional outlook for prediction market regulation.

Indonesia has pitched a bold plan to host a regional ASEAN oil storage hub as a buffer against Middle East energy supply shocks, but the proposal has encountered immediate headwinds: deep-seated political distrust within the bloc, divergent national priorities, and ASEAN’s long track record of shelving collective emergency mechanisms.

The proposal, introduced by Indonesian Energy Minister Bahlil Lahadalia at the 48th ASEAN Summit in Cebu on May 11, calls for pooling emergency fuel reserves at a single facility on Sumatra, with Malaysia, Brunei and the Philippines as partners. The timing coincides with the US-Israel military campaign against Iran, which has disrupted tanker traffic through the Strait of Hormuz — cutting off roughly one-fifth of global oil and gas supplies bound for Asia.

Sumatra sits astride the Strait of Malacca, where more than a quarter of globally traded goods and up to 40% of the world’s seaborne crude pass. From a geographic standpoint, Indonesia’s candidacy is strong.

Yet political reality is murkier. Joshua Kurlantzick, senior fellow at the Council on Foreign Relations, noted that while cross-border energy cooperation works elsewhere — citing France’s arrangements with Italy and Germany, and strategic reserves maintained by Japan and South Korea on behalf of allies like New Zealand — ASEAN lacks the unity to replicate such models. The bloc’s ASEAN Petroleum Security Agreement, expanded last October to cover LNG, has never been triggered — not even during the current crisis.

ASEAN’s other dormant facility, the Chiang Mai Initiative born from the 1997 Asian financial crisis, has similarly never been activated. The stigma of IMF bailouts imposed on Thailand and Indonesia never fully dissipated.

Where might the hub instead go? Kurlantzick pointed to Malaysia, which emerged from its ASEAN chairmanship with heightened credibility. Energy expert Elbinsar Purba of ISEAS made a case for Singapore, which already commands world-class storage, refining, financial services and legal certainty.

But convincing eleven ASEAN governments to cede sovereignty over oil remains daunting. Ramkishen S. Rajan of NUS noted that energy security is easy to endorse in principle; the harder questions involve contribution obligations, release conditions, shortage priorities and whether those follow pre-agreed rules or real-time political bargaining.

ASEAN energy leaders say it’s time to move beyond declarations, but meaningful progress on a capital-intensive oil hub remains years away. Indonesia is pressing ahead with its own Sumatran facility regardless. The question is whether Jakarta can build the regional consensus needed, or whether the proposal will linger in principle alone.

OpenAI has announced a major partnership with the Singapore government to establish its first Applied AI Lab outside the United States, committing over S$300 million (approximately US$218 million) as part of a new initiative called OpenAI for Singapore.

Announced at the ATx Summit, the partnership was formalized with the Ministry of Digital Development and Information and aligns with Singapore’s National AI Strategy. The programme focuses on three core objectives: helping organizations adopt advanced AI technologies, building local AI talent, and widening access to AI tools across the economy.

The new Applied AI Lab will create more than 200 technical roles in Singapore over the coming years. Singapore will also serve as one of OpenAI’s global hubs for its Forward-Deployed Engineers, who work directly with companies to apply AI to real-world business and operational challenges.

The lab will support projects aligned with Singapore’s AI Mission priorities, including public service, finance, healthcare, and digital infrastructure. Denise Dresser, Chief Revenue Officer at OpenAI, said: “We’re excited to partner with Singapore as it builds on its position as a global leader in AI. Singapore has strong technical talent, trusted institutions, and a clear ambition to use AI to drive long-term growth and improve people’s lives.”

Beyond the lab itself, the initiative includes educational programmes developed in partnership with Singapore’s Ministry of Education and GovTech, focusing on AI-enabled learning tools including support for Mother Tongue language learning. OpenAI will also support educators through a Singapore chapter of the OpenAI Academy and Codex for Teachers hackathons.

The company plans to launch a Forward-Deployed Engineer training programme and participate in the National AI Impact Programme, using its Codex language model to deepen AI capabilities across Singapore’s technology workforce. OpenAI will also explore accelerator programmes for AI-native startups and workshops for micro-entrepreneurs and small businesses.

This marks a significant development in cross-border AI regulation and governance, as Singapore positions itself as the primary Southeast Asian hub for frontier AI research and deployment. The move follows increased regulatory scrutiny of AI applications in the banking and financial services sectors across ASEAN, including MAS’s principles-based approach to AI in financial services.

The partnership comes at a time when competing jurisdictions are racing to attract leading AI companies while establishing regulatory frameworks that balance innovation with consumer protection. Singapore’s government-backed model, combining substantial financial commitment with clear regulatory pathways, may prove influential in shaping how other ASEAN nations approach frontier AI governance.